Saturday, July 27, 2013

FedEx’s Philippine Forwarder License in Jeopardy

FedEx says it will continue to operate domestic and international services in the Philippines without interruption while it waits for the country's Supreme Court to make a final ruling on the legality of one of the logistics giant's air freight forwarding licenses.

The Philippine Court of Appeals in June upheld a January decision by an appellate court that found FedEx's Philippines business is foreign-owned and therefore violates constitutional limits on foreign ownership. As a result, FedEx's International Airfreight Forwarder License, which allows the company to carry goods from point-to-point within the Philippines, was ruled invalid.

In a statement to The Journal of Commerce, FedEx said the case might not be heard by the Supreme Court for "perhaps two years" and insisted its domestic air freight forwarding operations would continue as normal until a final legal decision was made.

The company said a second license covering air transport to and from the Philippines was not affected by the case. "FedEx's license to undertake international transportation to and from the Philippines remains valid and current, and is not the subject of any legal proceeding," the company said.

FedEx's International Airfreight Forwarder License covering domestic air freight operations was issued by the Civil Aviation Board in 2011 and is due to expire in 2016. The January court ruling concluded that domestic freight forwarding should be considered a public utility subject to the constitutional requirement of 60 percent Filipino ownership.

“This court ... finds no cogent reason to revise, amend, much less reverse, the decision dated Jan. 23, 2013,” the Court of Appeals decision said. Although the case was heard by the Court of Appeals in June, the outcome was only made public this week.

"Should the Supreme Court agree with the Court of Appeals, FedEx will not be able to perform air freight forwarding in the Philippines," FedEx said. "This, however, will not affect its license to transport goods into and out of the Philippines. "Further transport of goods from Philippine airports to consignees or vice-versa can be undertaken by subcontractors, as FedEx has done for many years in the past, or by a company established with 60 percent Filipino ownership."I